This startup has an algorithm that finds discount flight tickets 'hidden' on airline websites

Lucie Bresova and Oliver Dlouhy.
Skypicker
You probably book airline tickets through a travel aggregation website such as Expedia or Travelocity. Or maybe you go direct to the website of the airline itself. Those sites actually contain hundreds of cheap, "hidden" flights that airlines don't show to consumers, and consumers can't find them.

Some of these flights can be priced 50% to 90% lower than those booked via a regular flight ticket, according to Lucie Bresova, the CFO of the Czech Republic-based Skypicker. Skypicker is a flight-booking app that blew our minds when Business Insider discovered it on a visit to Prague last week.

When Bresova first made that claim, I scoffed: 90% cheaper? Sure. Dream on.

But Skypicker is so clever that once you understand how it works — and once you know that Skypicker has a ticket-buying algorithm that finds the cheap, unseen tickets and automates the buying process — you cannot help but be impressed.

It's one of those companies that make you think, "Why did no one think of this before?"

Before learning how the app works, it is worth knowing the story of why the app exists in the first place. Three years ago, Skypicker's founder, Oliver Dlouhy, was trying to book a flight for a vacation with his girlfriend. He wanted to save money on a flight from Prague to Portugal. All the direct flights were expensive. And there were very few connecting flights through other cities. But then Dlouhy noticed that if he booked a ticket from Prague to a random European city, like Oslo, on one airline, and then a ticket from Oslo to Portugal on a competing airline, the combined price of the two "unconnected" connecting flights came to less than the price of a direct flight.

But finding this information took Dlouhy an entire day of manually searching individual flight websites.

This is the key problem: Airlines don't list possible connections with rival airlines, or "noncooperating" airlines (those that aren't in an international alliance). They do list their own flights, but they don't indicate whether those flights might link up with a flight offered by another company. Similarly, travel websites such as Expedia and Travelocity don't list all flights from each carrier, because they either don't have that information or are withholding it.

Most consumers don't know that these flights might actually connect because it is not obvious that the best flight from Prague to Portugal might go through Oslo. Sure, it might take longer, but adding a daylong stopover in somewhere like Barcelona isn't a hardship if you're on vacation. Knowing whether the flights link up can mean the difference between buying a €500 ticket to fly direct between two major cities or getting two €25 tickets from discount airlines and connecting the flights yourself via Skypicker — a 90% difference in price, at the extreme end of the discounts.

A screenshot from the Skypicker website.
Skypicker

And, Bresova says, a series of connecting flights on noncooperating airlines on a long-haul route can sometimes be quicker than taking the "official" route.

So Dlouhy found a developer, and they built a search engine to scrape flight data from other travel sites in the hope of putting these flights together in a way that makes sense for consumers. Needless to say, scraping other companies' data isn't ideal, so Skypicker acquired a small meta-search engine, Tripomatic, for $500,000 in January 2014 — more than value of Skypicker at the time.

Skypicker also persuaded 150 airlines to allow the company to list their data. Airlines were reluctant at first, Bresova said. "We are tiny, and we say, 'Give us your tickets and data,' and they say, 'No we don't need this.'

"It looks like we are just a travel app, but we work with huge amounts of data," Bresova added. We met Bresova at Socialbakers' Engage 2015 social-media conference, along with about a dozen companies on the Czech tech startup scene. (You can see all our Engage 2015 coverage here.)

Part of the challenge Skypicker had in the beginning was that from the airlines' point of view, every ticket sold for a cheaper, disjointed connecting flight is a ticket not being sold on a pricey direct flight — the kind of flights on which airlines make their biggest profit margins. But Bresova argues that those big direct routes like London to New York will always be full because certain passengers just need to get from A to B on deadline. Skypicker actually adds extra ticket sales across the system, she says, by exposing flights that consumers don't know exist and that airlines don't know they can sell.

The company is already successful. It had revenue of €4 million through April, up fourfold from 2014. The company has 80 employees and is booking about $175,000 a day in sales, Bresova said. In fact, the company just had a record €200,000 sales day. Not bad for an app that only really launched last year, whose oldest employee is Bresova, at 31. "Next month will be even crazier in growth," she says.

Skypicker's unique hoard of flight data will soon be displayed in the ticket-search engines Kayak, Momondo, and Skyscanner.